Source: Zach Copley/flickr
Last week, German Klimenko, the internet advisor to Russian president Vladimir Putin, told Russian news service Lenta.ru that accepting bitcoin is a crime. Klimenko’s (translated) statements:
Accepting bitcoin as a payment for anything is unacceptable because it is a crime…Any introduction of an outside currency into the balance is [...] always a blow on economy.
His statements should come as no surprise to anyone following digital currencies in Russia, where the government has opposed introducing or adopting any external currency. But this latest trouble for bitcoin in Russia comes on the heels of legislation the Kremlin has been trying to pass that would ban the digital currency as well as other virtual currency exchanges. Since late 2015, Russian lawmakers have been pushing to ban bitcoin, submitting draft bills to the legislative assembly, the Duma. (Early 2015 saw similar efforts, although they did not reach Duma.) The latest draft bill includes language that would ban the issue and exchange of “money surrogates.”
Crypto Coins News also reported last week that the Russian Finance Ministry is seeking to amend the Criminal Code to include punishment of up to half a million rubles or two years of “corrective labor” for using bitcoin.
Russia’s problem with bitcoin is classic- the government doesn’t understand the technology and therefore sees it as a threat. And this is not a new reaction on the part of Moscow towards disruptive technologies. It has overreacted in the past when feeling threatened by newer tech such as social media or even Wikipedia. But what Moscow doesn’t seem to grasp is that these technologies and content will continue to exist and be used despite any regulation it imposes or attempts to block/shut them down. Case in point: reports note that despite officials’ attempt to criminalize bitcoin activity, some large telcos such as Tele2, Megafon, Beeline and MTS are accepting the digital currency through services such as 7pay.in and Cryptonator. Russians can use bitcoin to pay for internet and phone service with those operators now — a move obviously at odds with the Kremlin’s wishes to curb the currency’s presence in the country.
Regulating the use of bitcoin, even if it is to criminalize it, is recognition that the currency plays a large, disruptive role in Russia’s economy. On the opposite side of the spectrum is the U.S., where some states are looking at how to integrate bitcoin in a profitable way. In Europe, Denmark has worked to establish safe bitcoin exchanges. Bucking that trend, expect Moscow to continue its pushback against the digital currency, even — or rather, especially — as bitcoin makes further inroads in Russia.
